Price Increase Management

Price Increase Management 

Most pricing errors are prices that are set too low, and thus, a price increase can be great for profits if done right. A price increase can be tough on some customers, however, and should not be done too often. Therefore, it is important that you get it right the first time, and set a new price you will not need to increase again in the near future. However, there is a fine line that needs to be found if the new price is too high, customers will leave for a competitor.

To find this line, willingness to pay for research is of the essence. It can show you with tremendous accuracy where it is, and more importantly, show you the pain points to watch out for. These pain points are also referred to as price walls: a particular point where even a tiny price change will have a disproportionately large impact on sales. You want your price to be increased to a point where profit is maximized, but you do not hit a price wall.